Casino major Melco Crown seeks to delist from Hong Kong exchange

KateOâKeeffe

Dual-listed casino operator Melco Crown Entertainment Ltd.
HK:6883MPEL, +0.95%
on Friday applied to delist from the Hong Kong Stock Exchange just three years after listing its shares in the Chinese financial hub, citing limited fundraising opportunities and onerous compliance obligations and costs.

The gambling company, which operates casinos in Macau and a newly opened property in the Philippine capital of Manila, said it would maintain its primary listing of American depositary shares on the Nasdaq Stock Market, where Melco Crown has been listed since December 2006.

The news comes after a disastrous year for casino stocks caused by a sharp downturn in Macau, the world’s largest gambling market, as China’s corruption crackdown scared off high rollers. Shares of Macau’s six licensed casino operators fell an average of 40% in 2014 as Macau experienced its first recorded annual fall in gambling revenue — a 2.6% drop after a decade of booming growth.

Galaxy Entertainment Group Ltd.
0027, -7.04%GXYEF, -2.64%
and Las Vegas Sands Corp.
LVS, +1.23%
unit Sands China Ltd.
1928, -7.87%
— the only two casino stocks that are part of Hong Kong’s blue-chip Hang Seng Index
HSI, -0.44%
— were two of the three worst-performing stocks on the index last year, weighing down the entire market. Galaxy sank 37% and Sands China declined 40%. Both listed Melco Crown entities, meanwhile, fell about 35% in 2014.

By contrast, in 2013, when Macau gambling revenue rose 19%, the share prices of Nasdaq-listed Melco Crown, as well as of Hong Kong-listed MGM China Holdings Ltd.
2282, -4.37%MCHVF, +3.41%
and Galaxy, all more than doubled.

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